Yen Holds Back Near Highs

London: 18 December 2023 (TraderMade): The yen clung near recent gains on Monday as traders awaited the Bank of Japan's (BoJ) crucial two-day meeting, a potential turning point for its ultra-loose policy. The dollar edged lower after last week's Fed-fueled slide.

Key points

Yen: Fluctuated after a 2% weekly rise, eyeing the BoJ decision for clues about future rate hikes.

Dollar: Extended losses following the Fed's dovish signal, despite escalating Houthi attacks in the Red Sea.

Aussie and Kiwi: Soared near five-month highs on improved risk appetite.

Euro: Stalled amid gloomy eurozone growth outlook, despite rising against the dollar.

Investors hold their breath for the BoJ's verdict on negative rates while riskier currencies bask in the Fed's dovish glow and the dollar retreats after its early rally sputtered. Europe's gloomy outlook keeps the euro pinned despite a greenback slip, setting the stage for a pivotal week in global markets.

Overall: The market awaits the BoJ's decision for direction while the dollar continues its downward trend and riskier currencies bask in the Fed's dovish glow.